Supply and Demand Both Weak, Butadiene Market Operates Weakly in October

October 30 report

According to the commodity market analysis system, in October 2025, the butadiene market in China experienced a significant decline. From October 1st to 30th, the price of butadiene in China dropped from 8,886.67 CNY/ton to 7,516.67 CNY/ton, with a price decrease of 15.42% during the period.

In early October: Following the holiday period, the butadiene market as a whole remained weak. Major Chinese refineries broadly lowered their factory prices, while downstream demand continued to lag behind, leading to a generally sluggish performance in the synthetic rubber market. Buyers showed limited enthusiasm for entering the market, with subdued purchasing intentions and lackluster actual transaction activity. Without robust demand support, the butadiene market continued to operate on the weaker side.

Late in the month: As the month progressed into its latter half, the butadiene market initially stabilized before eventually declining. Early on, weak downstream demand and subdued enthusiasm among synthetic rubber players led to tepid purchasing intentions for the raw material—butadiene—resulting in lackluster actual trading activity and a generally sluggish spot market, prompting minor price adjustments downward. By month-end, however, the combined effects of resumed maintenance shutdowns and the commissioning of new production capacity created an overall more relaxed supply situation. Meanwhile, overseas markets continued their downward trend, further amplifying bearish pressures in the local market. As a result, at the end of the month, butadiene prices in the Shandong region saw mainstream delivered quotes ranging from 7,520 to 7,650 CNY per ton.

Cost Perspective: According to the commodity market analysis system, the crude oil market experienced a mixed trend this period—first declining, then rebounding. In the first half of the month, the market was weighed down by several negative factors: First, OPEC+ initiated a new round of production increases totaling 1.65 million barrels per day, yet concerns persisted about long-term supply overhang risks, pushing crude oil prices lower. Second, the easing tensions between Israel and Palestine, combined with weakening U.S. demand and ongoing U.S. tariff issues that are dampening global economic growth and oil demand expectations, further contributed to the downward pressure on international oil prices. Additionally, rising U.S. crude oil inventories and the end of the peak driving season in the U.S. added to the gloomy outlook for both the global economy and oil demand.

However, as the latter part of the month progressed, OPEC+ resumed its planned production hike of 1.65 million barrels per day, reigniting worries about prolonged supply surpluses. Meanwhile, despite these challenges, the easing geopolitical tensions between Israel and Palestine, coupled with diminished U.S. demand and reduced trade dispute-related pressures, helped stabilize and even boost crude oil prices. By the close of trading on the 29th, the December WTI crude oil futures contract settled at $60.48 per barrel, while the December Brent crude oil futures contract closed at $64.92 per barrel.

Supply Side: As of October 30, the listed price for butadiene from Sinopec's various sales companies was 7,900 CNY/ton, a decrease of 1,100 CNY/ton compared to the same period last month.

Shenghong Petrochemical's 200,000 tons/year butadiene unit is operating normally, with a price of 7550 CNY/ton.

Yantai Wanhua's 200,000 tons/year butadiene plant is operating normally, with a price of 7,500 CNY/ton.

Dongming Petrochemical's 50,000 tons/year butadiene plant has restarted, with 336 tons for external sales, at a minimum price of 7,800 CNY/ton.

Demand Side: Since October, the restart of several production units has led to a partial recovery in China's butadiene output. Meanwhile, international crude oil prices have fluctuated downward, causing a significant drop in the price of butadiene—the key raw material—thereby pushing the cost center for cis-1,4-polybutadiene rubber sharply lower. Additionally, while butadiene rubber plant utilization initially rose in October before declining, easing supply-side pressures gradually. On the downstream side, tire manufacturers maintained stable or slightly increased operating rates, providing solid support for the steady demand for butadiene rubber. As a result of these combined factors, butadiene rubber prices weakened significantly in October. According to the commodity market analysis system, as of October 30, the spot price of butadiene rubber in East China stood at 11,190 CNY per ton, down 4.11% from the beginning of the month when it was 11,670 CNY per ton.

Market Outlook: From the supply perspective, with plants resuming operations and new capacity coming online, the market expects ample supply conditions to persist for some time, keeping the overall outlook on the supply side bearish. On the demand side, although the synthetic rubber futures market has shown a slight recovery, buyers remain primarily driven by immediate needs rather than speculative buying. As a result, market participants are still hesitant to enter the market in significant volumes, leading to subdued purchasing activity and weak actual transaction levels. Overall, given this scenario of simultaneously weak supply and demand, the butadiene market is expected to continue trading predominantly weaker in the near term. Market attention will remain focused on downstream demand trends.